Declining a stay on the plea of Hutchison-Essar on termination of sale deal, the court restrained the Indian corporate house Essar from selling the BPL circle to a third party.
Pronouncing the judgement, the Bombay high court said both the parties -- Essar and Associates and Hutchison-Essar can go for an arbitration and the arbitration tribunal should be set up within 30 days from now.
Once the arbitration tribunal is set up in the next four weeks, it should consider and verify whether the injunction order of restraining Essar from selling BPL Mumbai circle to third party is valid.
On August 1, Essar had called off the deal to sell BPL Mumbai Circle to its telecom joint venture Hutchison-Essar citing absence of necessary government approvals.
Although, Essar had offered to return the Rs 1,617 crore (Rs 16.17 billion) taken as deposit in lieu of selling 97.5 per cent stake in BPL's Mumbai circle to Hutchison-Essar, the Bombay high court had said that the five-day period would start only after court's verdict.
As per Thursday's verdict, the five-day period to return the money by Essar would now start only after the Arbitration Tribunal vacates the order restraining Essar from selling the BPL shares to a third party.
The Bombay high court said during the period of four weeks in the setting up of Arbitration Tribunal, both the parties -- Essar and Hutchison-Essar -- if they want, can talk outside the court to settle the case.
The matter was heard by Justice Nishita Mhatre.
None of the parties commented immediately on the possibility of an out-of-court settlement.
Till last week, there was no indication from either side initiating a move for an out-of-court settlement as the relations between the two had soured.
After Essar terminated the sale deal on August 1, citing absence of regulatory approvals including that of department of telecommunication, Hutch had offered to waive all conditions to which the Indian corporate house did not agree.
Even as the Hutch Counsel Iqbal Chagla had argued the DoT approval was under its obligation and it has already applied for the same, Essar had asserted that as per the intra-circle merger guidelines of the license, prior approval was mandatory to complete the merger.
Last year, Essar Teleholdings had acquired BPL Mobile, Mumbai, and three other circles for USD 1.15 billion and in turn sold three circles to Hutchison Essar, while striking a deal with the JV for sale of Mumbai circle subject to necessary approvals.
The deadline for the merger was June 30, which was later extended by one month.
In the absence of approvals from the DoT by the July 31 deadline, Essar on August 1, served a notice to terminate the sale of BPL mobile Mumbai circle to the joint venture partner, Hutchison Essar.
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